I’m a Numbers Gal!

Direct Deposit and Split Accounts for Tax Refunds

April 3, 2014 — Connie Holt, E.A., ATA, ATP

Taxpayers can have their refunds directly deposited when they e-file or by including their account information on their paper tax return..

Banks, mutual funds, brokerage firms and credit unions are all eligible to receive direct deposits. Before making this choice, however, taxpayers should make sure the financial institution accepts direct deposits for the type of account chosen.

Taxpayers also, have the option and flexibility of splitting refund deposits, among two or three different accounts, or financial institutions. For instance, a refund could be split between a savings account, a checking account, or an Individual Retirement Arrangement (IRA). Taxpayers can split their refunds when they e-file or by filing Form 8888, Direct Deposit of Refund to More Than One Account.

A taxpayer’s refund should only be deposited directly into accounts that are in the taxpayer’s own name; the taxpayer’s spouse’s name, or both if it’s a joint account.

Those who choose direct deposit get their refunds sooner, and direct deposit eliminates the chance of a lost, stolen or undeliverable refund.